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NTT Docomo To Invest Rs. 800 Crore In Tata Teleservices

NTT DOCOMO will invest a total of Rs. 800 crore (around $179 million) in Tata Teleservices Ltd, subscribing to a rights offering from the company; one portion of the funds has already been paid, and the rest will be completed in May. The amount of additional stake being picked up by Docomo is unknown, but prior to the investment, it had 26% in Tata Teleservices. In 2009, the Indian government had given an approval to NTT Docomo for the acquisition of 1,097,043,742 equity shares (27.31%) in Tata Teleservices Limited and up to 384,241,919 equity shares (20.25%) of Tata Teleservices (Maharashtra) Limited. The Rs. 800 crore investment is miniscule, in comparison with the Rs. 13873 crore allowed in 2009.

The funds are expected to be used by Tata Docomo for expanding its coverage, and strengthen the quality of its 3G network. Tata Docomo was the first telecom operator to launch 3G services in India. The GSM operator, since its launch, heralded the decline in prices in the Telecom sector in India, with the launch of the 1 paise per second billing scheme, and then offering piece-mealed pricing for SMS and GPRS as well. While that may have helped the company acquire customers initially, it’s active user base for Tata Teleservices (GSM and CDMA both) is around half (49.55%) of the 86.1 million that NTT Docomo mentions.

Active subscriber information for other telecom operators at MediaNama Charts.

The more interesting part of this partnership is about how Tata and Docomo build a larger ecosystem – the two are running trials of an NFC payments service in Hyderabad, and they did launch Docomics – manga comics – in India. No imode yet, though.

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